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Blog posts tagged GDP

The election messages continue to dance around reality. I did arithmetic at primary school, but did the politicians?

Here’s my maths. The government spends £400 for every £300 it receives, spending half our national income. If the country earned £800 per annum, the government spends £400, of which £100 is borrowed. Total government debt would be £500, rising by £100 per annum. This is less than six years away from going down the pan like Greece.

If we protect health, the government would have to cut a third of all spending to balance the books. That is an unimaginable level of cuts implying public sector pay falling by a third, which in turn would depress GDP severely making things even more difficult.

If GDP grows, it will be better. But we live in an uncertain world, with huge financial risks still lurking all around. Still all of the talk is about additional spending and what will be protected.

We have a financial crisis worse than anything seen in our lifetimes. Why are the politicians playing dumb and not getting totally real with the electorate. Maybe we still don’t want to hear?